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Yahoo Japan stock surges 16 per cent following Line merger discussions

By Lawrence Gash

Parent companies Softbank and Naver set to go 50/50 on Yahoo Japan, now known as Z Holdings

Yahoo Japan, one of Japan’s major internet firms, has seen its stock surge by almost 17 per cent after it confirmed that it was in merger talks with telecommunication and internet firm Line.

Japanese conglomerate SoftBank owns almost half of Yahoo Japan, which changed its name last month to Z Holdings. Shares in Z Holdings, which had a stock market value of about $17bn at Wednesday’s close, have surged 16.93 per cent by afternoon trading, standing at ¥449 JPY.

Through its Saudi-backed Vision fund, SoftBank has sought to invest in the current tech boom. However, investments in the early “unicorns” such as WeWork and Uber have raised some eyebrows. Softbank is thought to have lost at least $4.7bn following WeWork’s failed IPO attempt. CEO Masayoshi Son recently admitted: “My own investment judgment was really bad. I regret it in many ways.”

A merger with LINE is seen by many observers to be a more prudent investment by SoftBank. The deal would coincide with Japan’s increasing adaptation of cashless payments, and unite the operators of two of the biggest QR code payment apps in the country. Line Pay can be accessed by the 82 million users of the Line app in Japan, while SoftBank’s PayPay recently passed 19 million users.

The merger is expected to be finalised by the end of November and will likely see SoftBank and Line’s parent company Naver agree a 50/50 venture of Z Holdings, with Line and Yahoo under one roof.

In a statement, Line confirmed that it is currently considering ways to improve its corporate value but added that nothing had yet been decided.

FURTHER READING: Japan’s economy almost stalls as exports suffer

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